Fubon Financial Holding Co (富邦金控) on Monday forecast earnings to remain solid this year, driven by strong performance in its core businesses and equity investments — including artificial intelligence (AI)-related sectors — even as geopolitical tensions and market volatility pose potential risks.
Speaking at an earnings conference in Taipei, Fubon Financial president Jerry Harn (韓蔚廷) highlighted three key variables that could influence the group’s financial performance: the ongoing conflict in the Middle East, potential shifts in US tariff policy and market fluctuations tied to AI developments.
“While the long-term fundamentals of AI remain positive, shifts in market sentiment could complicate investment decisions,” Harn said.
Photo: CNA
Fubon Financial chief economist Rick Lo (羅瑋) echoed similar concerns, saying that the duration of the Middle East conflict would be a key factor shaping the global economic outlook
If tensions persist beyond six weeks into late April, financial market stability could be undermined and investor anxiety heightened, he said.
Kevin Warsh, who is set to succeed Jerome Powell as chair of the US Federal Reserve in May, is expected to begin exerting influence over the central bank’s policy meetings in about June, adding uncertainty, Lo said.
Against that backdrop, Fubon Financial said its dividend policy would remain unchanged, maintaining a 40-50 percent payout ratio primarily through cash dividends.
The final distribution would consider subsidiary contributions, capital needs, market conditions, peer practices and shareholder expectations, Harn said.
The conglomerate reported net profit of NT$120.94 billion (US$3.79 billion) last year, or earnings per share of NT$8.37, the highest among Taiwan’s financial holding firms.
Strong equity market performance continued to support its key subsidiary, Fubon Life Insurance Co (富邦人壽). The insurer’s total investment assets reached NT$5.32 trillion last year, generating a return of 4.9 percent.
Realized capital gains from equities totaled NT$170.37 billion last year, up 10.2 percent from a year earlier, company data showed.
Fubon Life said it plans to maintain a cautiously optimistic approach to its equity holdings this year, with a focus on AI-related sectors, while boosting allocations to high-dividend stocks to strengthen recurring income.
The insurer also expects its regular hedging ratio to remain between 20 and 40 percent, given that its foreign exchange reserve has exceeded NT$140 billion, the highest in the industry.
After accounting for a 1.5 percent fixed provision, total hedging costs this year could be kept at 100 to 120 basis points, marking a notable decline from last year, the company said.
Another major subsidiary Taipei Fubon Commercial Bank Co (台北富邦銀行) reported a record profit of NT$36.34 billion last year, rising 19.5 percent from a year earlier. Net interest income rose 14.1 percent, reflecting growth in lending and deposit balances as well as an improved net interest margin.
The lender said that with its core businesses sustaining double-digit percentage growth and credit costs maintained at 20 basis points, earnings are poised to hit another record high.
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